BOSTON – As part of its ongoing effort to contain costs, Pfizer is expected to announce deeper cuts to its workforce next Monday when it is scheduled to release its 2006 earnings and meet with industry analysts, according to Pfizer watchers.

While it is still unclear how deep the cuts will be, some Pfizer analysts are expecting the company’s foreign sales force to take the hardest hit. Pfizer has already slashed its U.S. sales force, announcing in late November that it plans to cut 20 percent of its U.S. sales representatives, or about 2,200 workers.

With around 100,000 employees, Pfizer has about 35,000 sales representatives worldwide.

In November, the drugmaker said it has already cut over 5,000 employees as part of an on-going restructuring plan aimed at saving the company $4 billion a year.

Deutsche Bank analyst Barbara Ryan told MarketWatch on Tuesday that she expects cuts amounting to an additional $2 billion in savings a year. In particular, she sees at least 2,000 layoffs in foreign sales people, particularly in Europe. She also estimates another 4,000 to 5,000 workers could be eliminated elsewhere in the company.

“They’ve pretty much have indicated that would be the case,” said Ryan, of European sales layoffs.

While she also sees Pfizer making moves to make its research and development operations more efficient, she’s not expecting any major layoffs in that area. Likewise, she doesn’t foresee any cuts to the company’s $7 billion a year R&D budget.

“I don’t expect that R&D will be a target for cuts,” said Ryan. “R&D should be flattish.”

Bank of America analysts also said last week said that they believe the international sales force will be cut to improve efficiency.

“When we look at the ratio of sales per rep between regions, Pfizer’s international reps are only 35-40 percent as efficient as its US force. This compares to the weighted average for the group of 65-70 percent,” wrote Bank of America analyst Chris Schott, in his note.

“We estimate that a 30 percent cut to Pfizer’s international sales force could eliminate over $800 million in annual costs, equating to 9 to 10 cents in annual earnings per share,” said Schott. He added that he was also looking for the company to announce cuts amounting to an additional $2 billion a year in savings.

Pfizer has been under considerable pressure in recent quarters due to the expiration of patents on several of is key products, such as Zoloft and Zithromax.

The company was also dealt another unexpected blow in early December when it announced it was pulling the plug due to safety concerns on the drug candidate torcetrapib, a planned successor to its primary revenue driver, Lipitor. Pfizer investors had hoped torcetrapib would be able to keep the company’s lucrative Lipitor franchise alive after the drug loses patent protection around 2010.

With sales of almost $13 billion in 2005, Lipitor is the world’s best-selling prescription drug and Pfizer’s top-selling product.

Pfizer has said it doesn’t expect to be able to lift revenue, which totaled around $51 billion in 2005, until 2009, when newer products are expected to pick up the slack. But since torcetrapib’s demise, analysts have questioned how profitable the company will be after 2011, when generic versions of Lipitor are expected to hit the market.

(c) 2007, Inc.

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